At the beginning of this year Jack Gerard, president of the American Petroleum Institute (API) said that his organization's top priority this year was to lift the existing ban on exporting crude oil that is produced in the United States. Of course, if something is a top priority for the API it means it has to do with making more profits for the oil industry. So who then is looking out for the rest of us?
The oil industry. If you believe them. They have been waging a massive public relations campaign to pressure politicians to vote to lift the export ban. The message is that lifting the export ban will lower gas prices and help the U.S. consumer of gasoline.
However, according to polls, the U.S. consumer isn't buying this. And thus the idea of exporting oil to other countries while we still import it from places like Saudi Arabia is unpopular with the American public.
And you can't really blame us, right? For years we were told that we needed to "drill baby drill" so we could "bring the troops home" all in the quest for "energy independence." So why would we suddenly think exporting oil is a good idea when we currently import so much of it?
We don't. But apparently the oil industry and many politicians have changed their minds. When fracking proved successful at extracting tight oil from shale it changed the dynamics of the US oil market. And the U.S. is now producing near record amounts of oil. However, not even close to the amount of oil that we still consume. The U.S. is currently producing 9 million barrels a day of oil. And consuming around 19 million per day.
So why are the oil companies so eager to abandon the idea of Energy Independence when the the US is still so far from such a goal? Because there is more money to be made if they sell the oil to China, India and South Korea than if they sell it to American refiners.
So, Energy Independence has been scrapped. And now you are being told that we need to export oil because it helps with Energy Security. It's a bit of a hard swallow for most people but the powers that be are saying that to make American safer against threats like Russia and Iran, we need to export more oil.
Of course companies like ExxonMobil, who are pushing to have the ban lifted, will also be producing oil in Russian and Iran. So, the whole energy security argument doesn't hold up upon scrutiny.
But you will hear the phrase Energy Security with increasing frequency as this debate heats up. At a talk I attended in June in Wash., D.C., Secretary of Energy Ernest Moniz spoke about the country's strategic petroleum reserve. I lost count of how many times he said energy security. It obviously is the new talking point.
Following this issue for the past year it is easy to see that the PR effort is working. Last year the idea of even putting forward a bill for a vote to lift the ban was considered toxic.
Last year an analyst from Bank of America wasn't optimistic about the prospects.
“A full repeal of the crude oil export ban is at least five years away under most scenarios.”
And then the Obama administration tested the waters with a very low key change in the law allowing companies to
export some light crude oil.
And companies like ConocoPhillips launched ad campaigns selling the idea that the U.S. has more oil than we need and thus exporting it will lower gas prices and be good for the American consumer.
And now there is talk by some Democrats of going along with lifting the ban. If they can get some concessions.
The conversation has changed very quickly. In June the Senate energy committee voted to send the billto the full Senate. A vote is now expected in September or October. In the full height of the primary madness it is likely to get little attention. Which is exactly what politicians want.
So another huge gift to the oil industry is waiting for a vote. The American Petroleum Institute and its members are lobbying hard for the vote. My mom recently got a robocall from the API asking her to call her Senator in Maine and tell her to vote to lift the ban. The industry obviously sees this as its window of opportunity if they are in the robocall phase of the operation.
There is a glut of oil on the world market right now. Harold Hamm, the CEO of fracking giant Continental Resources, has been leading the efforts to have the ban lifted. All the while saying the Saudi's are sabotaging the oil market by upping their production. And yet he promises if the ban is lifted, America will double its current oil production. There is cognitive dissonance like this at all levels of the industry's arguments on this issue.
If the U.S. is serious about addressing climate change, lifting the crude export ban is a non starter. But as a two year lobbying effort continues, it appears the industry has once again changed the conversation. And there is likely to be a vote on this issue in the next two months. The implications to the climate, the water and environment in America and continued military commitments around the world are huge. And yet, no one seems to be noticing. Which has to make Jack Gerard and the oil industry incredibly happy.